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How to Hire a Retirement Advisor


A retirement advisor can help clients plan, manage and optimize their financial resources to reach retirement goals. They do so by offering expertise in areas such as investment strategies, tax planning and creating a comprehensive retirement income plan. A financial advisor can also help you create a long-term retirement plan for your specific needs. Here’s what you need to know about hiring a retirement advisor.

What Is a Retirement Advisor?

A retirement advisor, also known as a retirement planner, is a professional who creates and guides retirement plans. They play an instrumental role in helping individuals and families create a strategy to ensure that their retirement savings will last throughout their lifetime and meet their retirement goals. In simpler terms, a retirement advisor is your go-to person for all things related to financing your retirement.

There are different types of retirement advisors with varying specializations, which can you plenty of options to choose from. These can include:

  1. Retirement income planning: Focuses on creating strategies to generate a sustainable income during retirement, considering factors such as Social Security, pensions and other retirement accounts.
  2. Investment planning: Specializes in designing investment portfolios that align with retirement goals. These strategies will also take into account your risk tolerance, time horizon and income needs.
  3. Tax planning: Provides guidance on tax-efficient strategies for retirement. These can include optimizing contributions, managing withdrawals and minimizing tax liabilities.
  4. Estate planning: Assists clients in structuring their assets to facilitate an efficient transfer of wealth to heirs, address tax implications and ensure the fulfillment of legacy goals.
  5. Social Security planning: Offers advice on maximizing Social Security benefits and considers the timing for claiming benefits, as well as spousal strategies.
  6. Long-term care insurance: Specializes in helping clients plan for potential long-term care needs. These can include recommending appropriate insurance solutions.
  7. Pension planning: Provides guidance on navigating pension options, including decisions about lump-sum distributions, annuities and other pension-related considerations.
  8. Healthcare cost planning: Assists clients in estimating and planning for healthcare costs during retirement. Will also consider factors such as Medicare and supplemental insurance.

Types of Retirement Advisors

Retirement advisors are a specialized category of financial professionals whose expertise lies in assisting clients with retirement planning. They offer important advice that is tailored to your financial situation, retirement goals and risk tolerance.

There are many types of retirement advisors with unique roles and specializations. Financial planners, for instance, consider all aspects of an individual’s financial life, including retirement planning, when creating a comprehensive retirement strategy.

Investment advisors, on the other hand, focus on managing a client’s investment portfolio to achieve their retirement goals.

These advisors often have a fiduciary duty, meaning that they are legally obligated to act in the best interest of the client.

Additionally, there are insurance agents who specialize in insurance products, like annuities, which can provide a steady income stream during retirement.

When choosing a retirement advisor, you may want to consider their certifications, which can demonstrate their area of expertise. Here are two common certifications:

  1. Certified financial planner (CFP): Holds a comprehensive designation covering various aspects of financial planning, including retirement planning, investment management, tax planning and estate planning.
  2. Chartered retirement planning counselor (CRPC): Focuses specifically on retirement planning strategies, addressing issues like income distribution, asset management and estate planning.

When You Need to Hire a Retirement Advisor

A couple reviewing their retirement plan with an advisor as they approach retirement.

If you have complex retirement plans or significant investment assets, you might need a retirement advisor. For example, if you hold multiple retirement plans like a 401(k) and an IRA you may need to work with a professional to create a tax efficient withdrawal strategy. Or, if you have a substantial investment portfolio such worth over $500,000 you may need the help of an advisor to rebalance your asset allocation and optimize your investments to lower your tax liability.

Here are three common examples when you may need to work with a retirement advisor:

  • Major life changes: Divorce, the death of a spouse, or a career change could require you to reevaluate your retirement plan. A retirement advisor can help you adjust your financial strategy, assess the impact on your retirement goals and develop a revised plan that aligns with your new circumstances.
  • Healthcare planning for retirement: As you get older, healthcare costs become a major concern. A retirement advisor can help you evaluate your Medicare options, understand potential long-term care needs and implement strategies to address rising healthcare expenses.
  • Receiving an inheritance or windfall: Getting a significant inheritance or windfall could require you to reassess your finances with a specific focus on taxes, investments and long-term wealth management.

How to Hire a Retirement Advisor

The process to hire a retirement advisor begins by defining your retirement goals so that you can determine which areas you need the most expertise in. Once you have a clear idea of what your retirement could look like, you would start researching potential candidates based on qualifications, certifications, specialties and client reviews.

You should then do your due diligence and verify the advisor’s credentials, such as Certified Financial Planner (CFP) or Chartered Retirement Planning Counselor (CRPC), to ensure that they have the necessary expertise that you are looking for.

Once you have narrowed down your pool of candidates, follow up by scheduling meetings or interviews to discuss your financial situation, retirement goals and gauge their approach to financial planning.

During the meeting or interview, make sure you understand how they get paid. What is their fee structure: Fee-based, fee-only, or commission-based? Knowing this can help you avoid any potential conflicts of interest if the advisor earns commissions for the sale of financial products.

Asking the right questions is key so that you can get all the information you need to make an informed decision. If you’re not sure who to choose, consider using different advisor lists for your state.

Finally, don’t forget to verify if the advisor is registered with the Securities and Exchange Commission (SEC) or the Financial Industry Regulatory Authority (FINRA). This will help you ensure that they meet industry standards. You can also request references from current or past clients. And, always review any written agreements or contracts.

Costs of Hiring a Retirement Advisor

Much like when you begin investing, you need to be aware of the expenses you’ll incur as you set your retirement savings on a path to growth with the help of an advisor.

The average cost of working with an advisor can be anywhere from 0.5% to 2% of assets under management per year. It depends on the services you’re receiving and the experience of the advisor you’re working with.

Advisors may also charge fixed fees for certain services. For example, creating a retirement plan could cost anywhere from $1,000 to $3,000, or more depending on the service that you’re receiving. This type of fee is usually for a specific task and is agreed upon before the work starts.

Bottom Line

A couple discussing different retirement strategies with a retirement advisor.

Engaging the services of a retirement advisor could potentially benefit your nest egg by maximizing growth and optimizing investments to lower your tax liability. The process of hiring a retirement advisor should be planned out carefully, involving research, interviews and the verification of credentials and fee structure, among other considerations. Ultimately, you need to find an advisor who can work specifically for your needs.

Tips for Retirement Planning

  • Finding a retirement advisor can help you reach your long-term retirement goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • A retirement calculator can help you see where your savings are at and whether you’re on track for what you need to retire.

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